Japan: Core machinery orders rebound in October
Latest reading: Core machinery orders—which cover the private sector, exclude volatile orders and are a leading indicator for capital spending over the coming three-to-six-month period—grew 2.1% in month-on-month seasonally adjusted terms in October, which contrasted September’s 0.7% decrease. The reading was nearly double market expectations and means core machinery orders in October were 0.9% higher than the Q3 average, boding well for fixed investment in Q4. Our panelists expect fixed investment to rebound in the quarter after shrinking in the prior three months, boosted by interest rates which are still negative when accounting for inflation.
On an annual basis, machinery orders rose 5.6% in October (September: -4.8% yoy). Accordingly, the trend improved notably, with the annual average variation of machinery orders coming in at an over one-year high of zero in October, up from September’s minus 0.6%.